HIGHPOINT COMMUNITY BANK

Risk factor changes

Wording that changed between the 10-K filed 2025-03-07 and the 10-K filed 2026-03-06, found by comparing the two Risk Factors sections automatically. Showing 12 of 36. Read the full section in the latest 10-K on SEC.gov.

• Added. We are currently a defendant in three putative class action lawsuits challenging aspects of our overdraft and/or insufficient funds fee practices, including allegations that fees were assessed in circumstances where transactions were authorized on a positive balance but later settled against a negative balance and/or that multiple fees were charged on re-presented items.
• Added. A significant loss of deposits could require us to seek alternative funding sources, which may be more expensive or unavailable on acceptable terms, and could adversely affect our liquidity, financial condition, and results of operations. 12 Our concentration in commercial real estate loans exposes us to increased credit risk and regulatory scrutiny.
• Added. For additional information, please see Note 11 - Commitments and Contingent Liabilities in the Notes to Consolidated Financial Statements in our annual report, to be delivered to shareholders in connection with the April 21, 2026 Annual Meeting of Shareholders (filed as exhibit 13 to this report on Form 10-K) for more information.
• Added. Rapid innovation in financial technology - including stablecoins and other digital assets, distributed ledger technologies, real‑time payment networks, embedded banking, and artificial intelligence - may change how consumers and businesses store value, make payments, access credit, and obtain financial services.
• Added. An adverse outcome in any of these matters, through judgment or settlement, could result in monetary damages, restitution, remedial relief requiring changes to our products, disclosures, and systems, and an increase in legal and compliance costs, any of which could be material to our results of operations.
• Added. These innovations could reduce our deposits (e.g., if customers hold value in stablecoins rather than bank accounts), compress or eliminate payment‑related and interchange revenues, and increase competition from non‑bank providers and larger technology firms with greater resources and scale.
• Added. If we are unable to adapt our products, pricing, and technology in a timely and cost‑effective manner, or if customers migrate to alternative platforms, our growth, funding, net interest margin, fee income, and overall financial condition could be materially and adversely affected.
• Added. Legal and regulatory frameworks applicable to digital assets and related activities remain uncertain and may evolve rapidly; changes could restrict our ability to participate in or provide services to these markets, or increase our compliance costs and potential liabilities.
• Added. They may also require significant investments in systems, talent, cybersecurity, vendor oversight, and compliance, and expose us to new operational, fraud, liquidity, Bank Secrecy Act/anti‑money laundering, consumer protection, and third‑party risks.
• Added. An extended period of stress in the commercial real estate market could result in increased loan delinquencies, higher credit losses, and reduced collateral values, which could adversely affect our financial condition and results of operations.
• Added. We believe our depositor base is relatively diversified, and we take steps to manage uninsured deposit risk, including monitoring deposit concentrations, diversifying funding sources, and maintaining access to contingent liquidity facilities.
• Added. The financial services industry is also experiencing a rapid increase in the frequency and sophistication of fraudulent attacks, driven by the proliferation of AI-powered tools, deepfake technology, and organized, transnational crime rings.